- The DXY index is holding around the 92.00 level so far.
- US GDP is expected to expand 33.1% during the third quarter.
- Initial US jobless claims fell short of estimates and rose by 778,000 last week.
The US dollar DXY index, which measures the strength of the dollar against a basket of major currencies, keeps its sales tone intact and pulls back near the 92.00 level on Wednesday.
The US dollar DXY index could revisit the 2020 lows near 91.70
The DXY index remains under pressure near the 92.00 region, where the 8-month support line is located, after the large number of economic releases on the US calendar and amid the prevailing risk appetite bias in the markets.
The dollar has barely reacted after initial weekly jobless claims will increase by 778,000, arrived worse than market estimates, and third quarter GDP showed that the economy will expand 33.1%, matching the previous reading.
In additional data, durable goods orders expanded 1.3% month-on-month in September and the preliminary trade balance showed a deficit of $ 80.29 billion in October.
The final November index of consumer sentiment from the University of Michigan, personal income / spending data, new home sales and PCE inflation will be released later.
What can we expect around the USD?
The DXY index remains on the defensive and a visit to the 2020 lows near the 91.70 level is not ruled out on the near-term horizon. The improved risk appetite sentiment has been bolstered by a clearer US political landscape combined with upbeat news on vaccines and better growth prospects. In addition, hopes for additional fiscal stimulus have resurfaced, which together with the Federal Reserve’s “lower rates longer” stance is seen as keeping the USD under additional pressure for now.
Relevant levels of the US dollar DXY index
At the time of writing, the DXY index is down 0.14% on the day, trading at 92.10. The next support is at 91.94 (Nov 25 low), followed by 91.74 (Sept 1 low) and 89.22 (April 2018 low). On the other hand, a break of 93.20 (November 11 high), would open the door to 93.48 (100-day SMA) and finally 94.30 (November 4 high).
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